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tv   Street Signs  CNBC  January 26, 2016 4:00am-5:01am EST

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good morning, everybody. welcome. you're now watching "street signs." >> these are your headlines. >> stocks resuming losses here in europe after heavy selling in asia sends the shanghai composite to a 14-month low. >> energy stocks taking a big hit as oil is back below $30 a barrel. analysts take a dim view on the sector. >> siemens bucking the trend after a 42% leap in profit and issues positive guidance for the year. the ceo telli cnbc he's bullish on china.
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>> big opportunities in china. the gdp growth of 6% to 7% is still three to four times as much as what we see in europe. >> a and philips another leading light, but the ceo warns the sell of one division will be less than the failed chinese deal. >> hi, everybody. good morning. welcome to the program. good morning, nancy. >> good morning. >> how are you? >> very well except for this market selloff we're seeing again. >> a couple points lower right now. we were still volatile yesterday. this morning, the volatility kind of continuing. remember that we've got the fed this week announcing their latest decision on wednesday. that two-day meeting wrapping up. bank of japan wrapping up their meeting friday. maybe just sitting tight a bit ahead of that and following the
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price of oil. let's glance at our european markets. we're lower across the board, down by 1.5% or so. the ftse and cac lower by almost 1.5%. the price of oil, of course. >> that's right. we've seen this correlation between equities and the oil price day after day. the correlation continues. brent crude off about 2.3%. wti lower by about 2.5%. we saw the u.s. stocks on wall street overnight losing momentum as that oil price dipped. let's see how oil stocks are faring in the european session. red arrows across the board. repsol also in the red, 1.5% lower. royal dutch shell also lower. this comes ahead of a crucial shareholder vote and their proposed merger. that stock coming into focus. bp off about 2.5% as well.
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let's take a look at some of the smaller oil names on the board. remember, we did get note from hsbc really warning about the oil services companies. a theme we've been seeing stateside as well. halliburton ceo yesterday warning about the ongoing rout in oil prices. meanwhile, it's taking a toll on the chinese oil majors, all closing down more than 5%. s&p cut its credit rating on three of these stocks. meaning while, the late selloff in china saw the shanghai composite close below 2800 since december of 2014. let's get to more on those moves in singapore. >> hi, nancy. i think the volatility never really went away. that's really a central and intrinsic part of these capital
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markets in mainland china. we saw it return with a vengeance. had been relatively quiet over the past week or so. we saw the really brutal selloff manifest itself in other courses of the asian markets. but it's back in mainland equities. let's not forget this is an evolving market. with that evolution comes this volatili volatility. this is nothing new, really, given the fact the new normal in the chinese markets has been this pronounced volatility and sharp moves to the downside. we've seen 7%. we've seen 8%. this was precircuit breaker days. but shanghai composite, 40-month lows. oil was central to the negative feedback loop in the china markets and elsewhere across the region. i really think it's fears of further capital outflows. yes, we have seen stable fixings, a series of them in the past couple days, by beijing for the currency, for the yuan. given the macro environment,
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depreciation pressure undeniably is still on the currency. with that depreciation pressure comes the outflows. that's what the markets are concerned about. yes, the pvocs topping up the liquidity tanker domestically, but i think the currency is really front and center and lies at risk for the capital markets. it's only going to come down to the central banks in terms of confidence, sentiment is shot to pieces. still, are they going to deliver? all eyes on the fomc, all eyes on the bank of japan. yes, draghi did utter some soothing words about action possibly in the march meeting, which is a live one. you can't take that away from him. but that draghi rally did not last very one, did it, in the capital markets, especially out here as well. so do we get another comfort blanket from the fomc? possibly. do we get it from the boj? maybe. does the overall impact help the markets? maybe just in the margin.
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but these rallies are fading very fast. very short-lived in nature. that's where we stand over here. china is back again in the center of this volatility globally. that's where we stand. back to you. >> thanks. amazing, still so much focus on the central banks. you almost forget we're in the midst of a busy earnings season. more talk about that coming up. >> we have a ton of companies reporting. also stateside this week. >> picking up here in europe on thursday. >> i just tweeted, who's bullish oil? i'd quite like to know who's bullish oil after these notes went out this morning where goldman sachs, hsbc cutting their ratings. e-mail us. get involved early on with your opinions. you can also find us on twitter. we'l float it for you on screen here throughout the show. let's talk to somebody else. hi, rory. who's bullish oil? are you? >> we're warming up.
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i think it's fair to say supply, response has been quite aggressive. companies are cutting cap ex quite aggressively. they're reducing production guidance. that's been happening over the last three to six months. it feels as if the price of oil is reflecting quite a significant amount of bad news, and there are lots more factors involved, obviously. >> so warming up as in we're capitulating at the moment? there's a bigger scenario taking place and we might be buying back into the oil stocks, oil services companies? or warming up as in just taking our time a bit. >> the oil price is reflecting an awful lot of bad news. part of it is the dollar strength. you've had a glut of supply coming on to the market, which we hope will normalize the dollar strength. to our mind, it's less of a sort of dramatic macroeconomic
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effect. >> and oil just one factor here. we were just talking about the central bank issues coming up, watching just how dovish the fed will be when we get the latest announcement this week. and other concerns we're entering into a bear market, despite what's going on in the oil prices, if that's true here in the u.k., where are you positioning? >> well, to our mind, this is a market correction as a pooppose a deterioration. we're viewing this as an opportunity. yes, the market has been fairly indiscriminate in the way it's been sold down. so there were lots of opportunities across the market. within the market itself, you know, we've all seen the sort of growth versus value trade. we're seeing a lot of value stocks look incredibly attractive. strong balance sheets is something we look for. the banks are looking very oversold. there are a number of other opportunities out there at the moment because of this highly correlated market. >> any specific names that currently look attractive? >> i'd rather not talk about names. but there are a number of stocks
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out there that we're looking at. >> i notice also that you seem to like companies in europe more than elsewhere at the moment. >> well, we think the european recovery is on track. if you take the view, which we do, that the macroeconomic environmental globally is not in meltdown, this is a market issue, the european recovery continues. it's progressive. it's not off to the races. it does feel like the improvements are continuing. pmi surveys in the services sector are very strong. so this trade looks like it's set to improve earnings for european corporates this year. that's why we're sort of saying europe is a resilient place to be in a wider global context. >> other people would say, look, say it as it is that we're in a recession regardless of what the numbers are stating. we're anticipating, what, a 5% drop in earnings revenues during
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this season. so it's interesting to hear people like you and other guests talking about how the numbers look brighter and there are brighter opportunities ahead. >> i would refute the european recession comment. seems to me as if europe has been resilient in 2015, and that will continue into 2016. it's about this intro-european trade aspect around services and consumer spending. we see that coming through in the numbers. >> one potential risk, despite this recovery on track, particularly when we talk about u.k. corporates, is the threat of brexit coming out. discussions are in place to hold this referendum in place by the end of the year. when you look at u.k. equities, are they appropriately pricing in this risk? >> my sense is that it's a negative event in terms of confidence. people -- you know, this is a cliche, but the uncertainty around the vote is going to create negative sentiment around the u.k. market. i think that continues until
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there's some certainty around whatever the vote outcome is. >> i'm going to see who's bullish oil. michael says why. i don't know, you tell me. we're just neutral mouthpieces. i am, at $100 cheap, under $30, expensive. being a contrarian. might be another way of viewing things. never know. thank you very much for your time this morning. keep your tweets coming through. you can find us also on good old-fashioned e-mail. meanwhile, we are looking at deals flowing. that's going towards iran. ready to sign an agreement for a 50/50 joint venture with the automaker. this according to reuters reports. this comes as iran's president
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continues his european tour with italian trade deals that could reach 17 billion euros. the prime minister says this is, quote, just the beginning. well, nbc's claudio is there. today we're looking at high-profile visits from the iran president. is that right? >> reporter: well, indeed. i'm here in st. peter's square, where we expect president rouhani to arrive in about 40 minutes from now. that's when he's scheduled to meet with pope francis. this is very important because he will be the first iranian president to meet a pope since 1999. now, what will they talk about? the iranian president is expected to show his appreciation for the pope's backing of the nuclear deal, for his relentless promotion of interfaith dialogue between islam and christianity. will they talk about human rights?
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we don't know that yet. certainly pope francis has been an outspoken critic of the death penalty and capital punishment. iran is known to have one of the highest numbers of executions per years. human rights group saying those increased during the presidency of rouhani. certainly what we're looking at is whether rouhani will invite pope francis to visit tehran and iran. he will be the first to do so if the invitation goes out. he may take that opportunity, pope francis, because he grew a reputation as quite a negotiator, a peacemaker. he may use that opportunity to foster some kinds of peace, throw an olive branch to shiite muslims, well he warepresented iran and in iran, and sunni muslims and try to foster some peacemaking activity for syria as, of course, iran backs bashar al assad over there. back to you. >> thank you for that, claudio. an historic visit, no doubt.
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we look forward to the updates throughout the day. we'll be bringing you more from rome later. plenty more to come here on the program. did easy jet earnings take to the skies? we'll be looking ahead to the summer season as the budget carrier posted its first-quarter earnings. on top of that, washington's mayor warning of further travel chaos with the big blizzard clearup continuing in the states. and kristen stewart calling on fellow actresses to do more if they want to be paid more. we'll find out how the movie star weighed in on hollywood's gender pay gap debate. you're watching "street signs." good morning, even. -- everybody. ills, and fever, there's no such thing as a little flu. and it needs a big solution: an antiviral. so when the flu hits, call your doctor right away and up the ante
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hi, everybody. welcome back. you're still watching "street signs." siemens raised its earnings
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guidance after first-quarter results outpaced expectations by sending shares higher, as you can see here, up by 6%. cost cutting and a weaker euro boosting industrial profit in the health care, transport, and energy units. ubs says siemens has set itself up to be one of the best performers this earnings season. the ceo told cnbc in a first-on interview that he sees macroeconomic challenges, but he's still optimistic about china. >> there was a lot of doom day in davos about china, but i do have to say the real economy in china is much better. there are big opportunities in china. the gdp growth of 6% to 7% is still three to four times as much as what we see in europe. >> let's also bring you a check of philips. shares moving sharply higher after the company beat fourth quarter expectations. they some comparable sales rise 2% but warned of a cautious
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2016. this is somewhat of a continuing trend we're seeing with earnings season, even those companies that beat still warning on the outlook. i suppose the good news here is the strength is coming from the division they continue to build, the health care units. we know they're trying to selloff the lighting division. some disappointment, i think, saying they now expect to fetch less than the 3.3 billion deal that was initially hoped for. the u.s. kind of pulled the plug. nevertheless, investors seem to like what they see when it comes to the division with the health care units. >> i find it fascinating. a quote here, why the u.s. has blocked a dutch company from selling its lighting division on national security grounds is unclear. because the u.s. has nothing to do essentially with -- it's a dutch company, and it's a chinese private equity group that wanted to buy it, but the u.s. said, oh, security, you can't do it. >> except that they have a base in california.
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>> that's true. then you can ask, what do these lights have to do with security? they're found in tvs, mobile devices, computer displays, things like that. apparently it's the bulb in the actual light that can be used for spying. so you can spy. >> very sensitive subject, as you know, right now. but it does raise the question of whether it will go for another takeover offer or ipo. >> they're looking at everything now. >> that's true. meanwhile, we're also taking a look at easy jet shares, trading lower after disappointing revenue in the first quarter. this as the paris and egypt tax weighed on demand. despite this, the airline maintains its full-year profit guidance thanks to an uptick in improving fuel costs. mark simpson joins us on the phone. mark, pleasure to have you with us. looking closer at these results
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from easy jet. one thing that stood out to me was citing the better improvement in fuel costs because you've pointed out that the really, easy jet is at a disadvantage when it comes to fuel hedging. walk us through that. >> absolutely. good morning to you. in terms of the fuel, it's no doubt all airlines see an increasing benefit from falling fuel, although that will be weighted more into the current 17 and 18 years given the hedge positions. the hedge position for easy jet, which puts it at a disadvantage for the all-important summer season. they've updated us on the fuel hedges. they're 86% covered at an 823 metric. that puts it at about 100-plus u.s. dollars at a ton, a higher price than the hedge positions. i think the hedge -- i mean, they'll get benefits from falling fuel, but lower than the competition.
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that opens it up to pricing pressure. >> so lower than the competition. we talk about the benefits coming from fuel. another area of concern was the impact from the terrorist attacks both in paris and the threat we saw out of egypt. do you expect this to be a continuing real impact for the airliners and not just easy jet for some of its competitors in the next quarter? >> less so in this quarter. yields are improving from that very weak november to december period. i think the sort of guidance shift they've given us, which was for first half yields on a constant currency base to be slightly down given in last november, and now they're saying they expect it to be down mid-single digits. that's a significant shift to the downside. within the q-1, they were saying that in november and december, they saw yields down in the high single digits and attributed 1.5
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percentage points of that to egypt and 2% to paris. strip those out, and they were around that mid-single yield digit decline. looks as though from first q to second q, similar but still quite a significant step down. i think that's a reflection of fuel givebacks passing through to consumers, adding increasing competition. the other side of that was actually a much better than expected performance on their cost front. >> hi, it's louisa. i've heard analysts say it's going to be a tough summer for the airlines. and i've heard them say things are looking brighter and passenger-forward bookings are looking fresh, looking good. what do you think? >> i think the outcome on command continues to surprise to the upside as it did in 2015. particularly the sort of shift in demand moving more towards southern europe. so spain's got to be a very
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strong feature in 2016. against that, there's obviously the increasing competition between certain airlines increasingly getting into easy jet's face in their primary airports. we've seen quite often easy jet retreating in the face of that. they're closing the madrid route. they're obviously closing rome. they will put those down to other commercial interests, but i think it very much reflects an increasing competitive risk, particularly coming into the summer. >> mark, thank you very much for being with us this morning. mark simpson, aviation analyst at good body. and france could be facing a huge travel disruption as three unions representing 5 million workers gets set to go on strike. unions are scheduled to march
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through paris around lunchtime, but air france says all long-haul flights today are guaranteed as well as 80% of short-haul journeys. now moving on to telecom's news. dixons carpho rallying this morning after guidance was restored to 450 million pounds. though in the meantime, we've turned around a bit. currently 1.5% lower. but this was after a stronger christmas trading period. the british company said sales rose by 5% in the u.k. and ireland and by 9% in southern europe. >> and french telecoms group iliad has made tentative inquiries into entering the u.k. market. that report states their move into the u.k. market could hinge on the 10 billion pound '02-'03 merger. >> sprint has axed at least
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2,500 jobs at several call centers in an effort to cut $2.5 billion in costs. the u.s. carrier, which is majority owned by japan's softbank group, has been amid a turnaround following investor concerns that the firm was spending too much money to attract new customers. softbank shares trading lower today. sprint has seen an almost 50% plunge through the past three months. >> meanwhile, european union anti-trust regulators are reportedly set to punish japanese automaker parts. here's more from tokyo. >> reuters says the companies in the alleged cartel a. the firms have not commented on the report. the eu watchdog has the power to issue fines up to a tenth of the
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violators' global sales. regulators around the world are ramping up to take action in order to create a fair business environment. japanese business customs such as group furm's gatherings are set to draw the attention of authorities. last september ngk insulators, which is a japanese car parts manufacturer, was charged a $65 million fine by the u.s. regulator for manipulating prices of exhaust purrification products and three people were prosecuted. an investigation in the u.s. led to a class-action lawsuit in michigan last year, accusing auto parts manufacturers with price fixing, with several japanese makers included, settling for a hefty payout. that's all from the nikkei. bank to you. >> thanks for that. let's move on. have you heard of the term lumbar sexual? >> i have not. >> apparently it's like a lumber jack. kind of big and burly and have
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axes in the woods. they build a fireplace for you and things like that. a nice fire. they always have beards, right. >> somewhere out in montana. >> yeah. always fantastically good looking. by the way, if you go to denmark at the moment, everybody has a beard. >> i know, it's the big thing. here in london as well. east london. >> u.s. even. certain places. well, apparently the caveman look is coming back. it was made popular by the actor tom hardy, who can pull off the slightly overgrown look to perfection. i think we have a picture of him here on pinterest. >> hard to see over here. >> now there's apparently scientific evidence to back up the health benefits of having a beard as well. researchers at a hospital in boston found that the faces of bearded men apparently are three times less likely to host the mrsa bacteria than seen in their
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clean. shaven compatriots. >> health benefits. >> exactly. the investigation didn't look into some other details about whether the results contributed to a higher rate of illness in some other ways, but let us know what you think about the bearded look. >> house speaker paul ryan is sporting a beard. i was surprised to see that. >> i kind of like it on him. makes him look more approachable. >> oebkay. we'll go with that. we used to think of lawmakers on capitol hill very clean cut, almost military shaven. not the case anymore. >> why not flaunt it? e-mail the show. the address is we're on twitter as well. >> get in touch with us. i'm @nancycnbc. >> and @louisa bojesen. coming up, brazil's embattled president facing a
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crisis. we'll assess the challenges facing the
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hi, everybody. welcome back. you're still watching "street signs." i'm louisa bojesen. >> and i'm nancy hulgrave. these are your headlines. stocks resuming losses in europe today after some pretty heavy selling in asia, sending the shanghai composite to a 14-month low. >> and energy stocks taking a big hit in that selloff. analysts take a dim view on the sector. >> siemens bucking the trend after a 42% leap in profits. it issues positive guidance for the year. ceo telling cnbc he's bullish on china. >> big opportunities in china. the gdp growth of 6% to 7% is still three to four times as much as what we see in europe. >> philips another leading light after the dutch company beats expectations, but the ceo warns the sale of one division will
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generate less than the failed chinese deal. hi, everybody. welcome back. the iranian president hasan rouhani is addressing a business forum in rome at the moment. he's making the rounds here in europe. so the first time since the lifting of the iranian sanctions. he's been meeting with the pope, things like that. that meeting coming up. so he's speaking currently live in rome. we'll tell you more about this throughout the day. >> and meanwhile, let's give you a check on how u.s. markets are set to open. you'll see red arrows across the board once again here. the s&p 500 called lower by about ten points. a triple-digit decline for the dow at this stage. the nasdaq off about 39 points. remember, we did see the major markets close lower by more than 1%, special weakness in the energy sector and transports as well. we'll look at how this is
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playing out into the european session. we're seeing weakness across each of the major markets with the ftse 100 off by 1.4%. the dax, 1.2%. similar picture for the french and italian main markets. again, no surprise here. continued weakness, especially in energy and gas stocks. let's look at where oil prices are. as you can see, brent crude off now 2.5%. a similar picture for wti crude. both wti and brent now below that crucial $30 a barrel level. well, despite these moves, opex is not dead. that was the message from kuwait's governor. she said the group cannot cut oil production alone and called for coordination with non-opec countries to stabilize the market. meanwhile, venezuela's oil minister has called for opec and non-opec producers to meet next month to discuss how to get oil prices back to, quote, a fair
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level. joining us now is president and founder of union group. juan, pleasure to have you with us. >> good morning. >> looking to take a broader picture, look at exactly how the oil price dropoff here is impacting latin america. we'll get more into venezuela in a minute, what the country is facing there when we talk about extreme hyperinflation. but you're seeking out opportunities due to the low oil price. >> we're a different kind of shop. we are private equity. we have a three to five-year view. when these things happen, oil or other commodities are 10, 15, 20-year low, we see an opportunity. we have assets that take hundreds of millions of dollars to develop. we are there picking up some smaller ones. some bigger ones with productions at very good prices
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on our idea is to take advantage of this short-term opportunity. in five years, it's going to be very reward. >> so the opportunity is there. but let's talk on a broader scale when we speak about venezuela. a national emergency when it comes to the inflation level. they aren't bringing in the oil revenues they once were. the inflation could hit above 700%. is there anything the government can do? >> it's very difficult. i think venezuela relies on oil almost exclusively. i think with oil below $30, it's almost impossible. they have the instruments or money to solve them. they had a change of congress. you have elections in almost a year. i think it's very likely we see a regime change in venezuela, like we saw, for example, in argentina. that's not necessarily bad because it just triggers a
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coming back into more market-friendly policies. some of those countries are coming back to the market. >> of course, venezuela not only relying on oil and gas but also relying on brazil. when you look at what's going on in brazil, it's astounding. i was reminding myself that they lent $10 billion to the imf back in 2009. i mean, they overtook britain and france as being the fifth largest economy. their gdp in 2010 alone was 7.5%. brazil is literally, some might say, going down the drains at the moment. how does brazil stop the furthering of a recession that's now in its second year? >> we all thought three, four years ago brazil had all the conditions to become really a high, world-class country with very, very strong economics and good financial situation. looking at it now, we have a 4% recession, 11% inflation, very high interest rates, and unemployment reaching 10% with a political crisis led by
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scandals, ministers changes almost every two, three weeks. so a lot of trouble recovering from the current situation. we don't see a catalyst for that recovery, and we don't see an end to this sliding toward a tougher and tougher situation in brazil. from all of latin america, i think brazil is more difficult and where we don't see a very strong recovery. >> if this weakness is continuing, what happens to the rest of the region then? i mean, it's such a big country. >> yeah, the region really depends and is going to start coming back when commodity prices recover. we're a commodity export region and continent. we are reaching a really very strong bottom in most of these commodities. as soon as that starts recovering, most of our countries will start recovering. besides brazil that's in recession, chile, peru, colombia, uruguay are still growing. small growths, but are still doing okay. in a moment of consolidation,
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it's actually a very healthy situation in which they find themselves. >> but the oil situation aside, brazil facing a serious political problem here. they're in the midst of impeachment proceedings for the president there. you just suggested that venezuela might have to see a regime change in order to get real change into effect. is that a similar case for brazil? >> i don't think there will be an impeachment in brazil, but it's going to drag politics and state-owned companies, which are important for brazilian policy, into a process where it's difficult to make decisions. that's exactly what you have to do in a crisis of this magnitude. it's going to probably drag it out a little longer. >> what is your take on the financial situation in brazil? once we saw the ceo, he got wrapped into some of these corruption charges, get sent to prison. do you think that's a real possibility? >> well, they're doing everything to avoid it. the state-owned banks and institutions are trying to support the private sector and make sure that doesn't happen.
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i think they're managing that part relatively well. >> very briefly, where would you invest in latin america, in south america, if you had to choose a place? >> i think there are two clear strategies. one is the changing of the dark side of latin america. no foreign investment for over the last ten years. you start the process with argentina changing its government one month ago. doing really well since he arrived, changing all the restrictions. it's really putting those countries, starting from a very low base, into a positive ten-year trend. we will focus there because it's cheap and flows are going to be positive. at the same time, continue doing things in the countries where growth is still okay. peru, colombia, uruguay. but valuations or opportunities have now become very, very interesting. >> juan, thank you very much. good to see you. have fun on your travels. president and founder for union group.
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and we want to bring you some breaking news coming from the u.k.'s financial conduct authority. they've named bank of england's andrew bailey as its new ceo. he will start the job once his b.o.e. replacement has been found. so there we have it. financial conduct authority naming the bank of england's andrew bailey as its new ceo. >> now all eyes turning to apple after the bell today when the company could announce the first ever decline in iphone sales. wilfred joins us once again from stateside hq. we could be looking at declines and then nine times out of ten they surprise us to the upside. what's going to be different this time? >> louisa, ten times out of ten they surprise us to the upside. they've never had declines, outright declines in iphone sales. as you rightly point out, that's exactly where the focus is on today when apple reports after
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the bell. more than ever on that crucial iphone number. despite the fact that we are talking about the possibility of declines, that eventuality i don't think is priced in for investors that i've been speaking to. now, china, another crucial factor to watch. it now represents a bigger chunk of sales than europe does, and it's fast approaching the u.s. portion of sales as well. we will need to focus on that. what will they say? will they say they're experiencing things like starbucks and siemens have said recently, that the underlying economy is much better than what the stock market and currency might have been suggesting. they currently only have 30 stores in china, compared to, say, 53 in california. so they're coming from a low base there. now, apple stock fell below 100 this year. it has been widely reported. that's down from a high in may last year of 134. we closed last night just below 100. a lot of eyes on whether we will be moving back or below that
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level. we're down 12% in just the last month. so there is space for the stock to rebound, but do take a note of this. of the 50 analysts that are polled on the stock price, 43 have a buy or higher on the stock. an average medium price target, $141. so despite all the downgrades we've seen, all these questions of whether iphone sales will decline,he stock is at 100. the average buy price, 140. still a lot of positivity baked in. those earnings after the bell. also, a lot of focus on the fed meeting, which kicks off today. so many questions here stateside as to whether they've had a policy error, whether what they've done in december by raising rates has caused this volatility in markets. will they have to answer that in a statement, which comes tomorrow. we'll discuss the fed meeting with a former fed adviser. that is towards the end of
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"worldwide exchange," which begins in about 18 minutes' time. >> excellent. i'll see you again in around half an hour's time with a european update as well. see you later, alligator. >> we look forward to it. >> well, some other stocks to watch stateside today. jpmorgan chase has agreed to pay more than $1.4 billion to settle most of a lawsuit that accused the bank of draining lehman brothers of liquidity before its collapse in 2008. the settlement resolves most of an $8.6 billion suit that accused jpmorgan of siphoning billions of dollars that they did not need. the stock was off yesterday about 2.3%. showers in twitter tumbled in yesterday's trade after the company confirmed the exit of several members of the leadership team. meanwhile, a source close to the situation told cnbc that twitter's head of commerce, nathan hubbard, was named head of media on an interim basis.
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twitter stateside on the close yesterday down quite substantially, down by more than 4.5%. and sun edison shares rose in monday trade after green light capital has said it has been in talk with the company regarding a board seat and that it's looking to sell the solar company's assets or even the company itself. however, green light said no agreement has been reached on a board seat yet. take a look at sun edison, traded up almost 3% in yesterday's trade. now in tennis. serena williams topped maria sharapova in straight sets to advance to the semifinals of the australian open. the victory marks the 18th time in a row that williams has beaten sharapova. on the men's side, roger federer also advanced with a win over thom thomas. coming up, hillary clinton
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says she's outraged by the latest $16.5 million megamerger between johnson controls and tyco. stay tuned to find out why. aches, and chills, mom knows it needs a big solution: an antiviral. don't kid around with the flu, call your doctor within the first 48 hours of symptoms and ask about prescription tamiflu. attack the flu virus at its source with tamiflu, an antiviral that helps stop it from spreading in the body. tamiflu in liquid form is fda approved to treat the flu in people two weeks of age and older whose flu symptoms started within the last two days. before taking tamiflu tell your doctor if you're pregnant, nursing, have serious health conditions, or take other medicines. if you develop an allergic reaction, a severe rash, or signs of unusual behavior, stop taking tamiflu and call your doctor immediately. children and adolescents in particular may be at an increased risk of seizures, confusion,
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welcome back to "street signs." the world health organization has warned the zika virus is likely to spread across the americas, saying only canada and chile do not have the mosquitos linked to the transmission of the disease, which could cause brain damage in babies. the northeast united states is still digging out from the blizzard that killed at least 30 people and dumped more than two feet of snow across the region. washington mayor said several days of cleanup remain, and the city schools will stay closed until tuesday. hillary clinton has slammed the tax inversion aspect of the johnson controls merger with tyco as, quote, outrageous. the u.s. car battery maker will
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move its headquarters to ireland as part of a $16.5 billion deal. that's in a bid to save on taxes. and actress kristen stewart said it makes sense that male actors make more money than female actors, saying, quote, guys make more money because their maw vovies make more mone. stewart urged women to create more opportunities, adding, go write something and go do something for yourself. >> i hope she knows all the women who stood in very difficult circumstances many, many, many years ago in order for her to be able to stand where she is today. >> that's true. it's a contentious argument. she's taking one point. we've seen actresses on the other side as well. >> absolutely. >> twitter will go wild on that one. >> absolutely. mario draghi has once again been forced to defend the bank's monetary policy. speaking in frkfurt, he said their views would continue to be
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discredited. he reiterated that the key role the bank has played in shoring is up market and consumer confidence has been one that's been worthwhile. president draghi also used his speech to take a shot at the track record of the ecb's detractors. >> the ecb is contributing to securing the cyclical recovery by fulfilling our price stability mandate. and the concerns surrounding our monetary policy do not stand up to scrutiny. time and again, the critics of our decisions have been proved wrong. >> meanwhile, japan's economy minister said overnight that the bank of japan does not give advanced warning of policy action like the ecb has. this ended speculation the central bank could expand its qe program later this week. and for all of those sterling traders out there, we're around ten minutes away from the bank of england governor's testimony before the treasury select committee. we are exactly zero seconds away
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from jeffrey yu, ultra high-net worth strategist. do you think he's going say anything that's going to change how we think of sterling, given he recently, among others, helped to bring sterling to seven-year lows, indicating that the bank was nowhere close to hiking rates? >> over the last few weeks, the market denote where is he currently stands. the problem is how much data deterioration are we going to see and how much of a political risk is factored into the currency. on the latter point, you can't really assign a price to that. it's probably a debate that the b.o.e. will want to stay away from. competitiveness coming through from sterling. we'll see if he touches on that. >> jeffrey, i had somebody ask
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me two days ago, where do you think the euro is heading? i said i have absolutely no idea. what do you think? >> still rangy. slightly higher towards end of year. we're looking at 110 over the course of 12 months. perhaps a bit higher. anything that will significantly overshoot the ecb's current assumptions probably draghi will have to push back. >> you could argue a lot of these moves are somewhat dependent on what with the fed does. we've heard the fed say they intend to have about four rate hikes this year, though the markets are only factoring in one. where do you stand? >> probably best to stick so guidance. markets are valid and voicing their concerns. the fed is less exposed to dollar strength, for example, but they can't ignore what's going on right now in terms of their inflation trajectory. you look at oil prices, you look at china, canada, mexico. these main trading partners, the
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currency is weakening aggressively. that's going to exert downward pressure on prices as well. so the fed really has to have a cautious mind here. >> in the past, we've spoken to being an fx guru. now you've changed titles. i'm wondering what you're advising your clients in this particular portion of the population to do at the moment. >> well, i think right now everyone is really worried about volatility. so when it comes to investment, perhaps it's good to take a step back and try to whittle out the noise and the markets. look at alternative markets. private markets, for example. these are places where we think an ultra high net worth individual should be placing their money. we try to identify these longer term themes, demographics.
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>> i want to touch on your yen call here. over at ubs, you have a short japanese yen, long u.s. dollar. however, that's not really the trend we've been seeing, especially when we look at the trade today. when does this position really kick in? >> well, we might get some early warnings. at the upcoming boj decision, they'll have to look at this carefully. there are, i would say, strong arguments with the yen being undervalued right now. they really have a tougher job arguably versus the ecb. they need the yen as a tail wind as well for corporates, for the earnings translation. it was a big disappointment last year. they really need to ramp up the pressure this year. a weak yen is going to be an integral part of the process. >> jeffrey, so the call this
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week is what in terms of fx? we have the fed and bank of japan. what's the obvious play if there is one? >> i think the obvious play is still for the bank of japan right now. the fed caution, that's pretty much in the price. for the boj and fed, how would they react to the ecb last week? they will continue to do whatever it takes to hit their inflation targets. arguably, you know, japan, u.s., they are just as exposed to global head winds on prices. if the ecb is really going to aggressively turn the other way and pursue more easing, then both the central banks are going to be called into question as well. we still think more pressure is going to be on the yen side. on the flip side, though, if you're not too worried about the currentownward drift and high risk currencies, we think there are other opportunities out there, undervaluations, canadian dollar, norwegian crown. these energy plays in
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particular. >> jeffrey, good seeing you. thank you. ultra high net worth investment strategist from ubs wealth management. >> we want to bring you some breaking news coming from russia's foreign minister. this is in response to the announcement from a british judge that inquiried last week that they thought vladimir putin actually knew about the killing of the russian dissident, the killing that took place in britain some years ago. foreign minister lavrov out of russia is saying this british-led inquiry will damage, complicate bilateral ties between the two countries. more importantly, he's saying he thinks the british government could be sued for slander for those findings. >> so not the last we'll hear of that. >> no. >> you've been writing in. we tweeted earlier, who's long oil? who's bullish oil? a couple of you are. mentioned a couple of you already. david says, i'm bull uish on oi
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thinking longer term. also, orlando says, how can you not be bullish? at this point it's more likely to see $40 per barrel than $20 per barrel. >> and it's two different things. are you bullish on the oil price picking up and bullish on the equity price. >> you can keep your tweets coming through. @nancycnbc, @louisa bojesen. also, we've been talking about beards because of the term lumbar sexual. the caveman look coming back. it was made popular, among others, by tom hardy, who can pull off this slightly overfwroun loovergrown look, as seen on pinterest. there's also now scientific evidence to back up the health benefits of having a beard because researches at a hospital in boston found that the faces of bearded men were three times less likely to host the mrsa
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bacteria than their clean-shaven compatriots. loads of you writing in on this as well. linda, i have to say, she says -- where was it? oh, i just lost it. >> aarently the bead wins. >> she said something like it must be like kissing a porcupine. >> can't imagine that. >> beard or no beard, we welcome all of you on the show. >> that's it for today's show. i'm nancy hulgrave. >> i'ma bojesen. have a lovely afternoon.
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oil rout. crude prices getting crushed again, and so are stocks. china equities dropping by more than 6% overnight. >> plus, the federal reserve in focus. janet yellen and company gathering inicy meeting today. >> and planes, trains, and automobiles. still trying to get back to schedule after the weekend blizzard. but for some travelers, just getting to the airport seemed to be hard to handle. it's tuesday, january 26th, 2016. "worldwide exchange" begins right now.


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